UK Landlord Forum / Life

Hi,
We bought our first BTL property almost a year ago (purchased mid-April 2014, let late April 2014) and I was wondering when I need to let HMRC know about it?  The first tax return won't be due until Jan 2016 and I had it in my head that we wouldn't need to let HMRC know until later this year.  However, I can't find anything online about when they should be notified by?

The property is in my wife's name so there shouldn't be any tax due (earnings around 4k, rental profit about 5k).  The only reason I've put off notifying HMRC is the dread of spending 30 minutes on hold trying to get through to someone...!  Does anyone know if I can put off the pain until later in the year, or whether we're obliged to let them know sooner?

Thanks,

Um, you should let them know straight away (when you started letting it out).

If you only have the one property, it is entirely and actually possible for them to 'take' their whack via PAYE, if that suits you, of course.

It did suit me when I started out.

https://www.gov.uk/renting-out-a-property/paying-tax

Remember, there's a drive by HMRC at the moment, targeting Landlords... whatever you do, even if you think you have time until the next self-assessment, don't let them find you first.

Thanks Hippogriff.  I wrongly thought that we only had to worry about making sure we got the self assessment forms in on time, but see that you're supposed to let HMRC know when you start renting the property.  Since there won't be any tax to pay I can't believe that they'll be too upset about the late notification, nevertheless I'll let them know right away...

I don't think I'd trust HMRC or my wife's work with touching her PAYE.  Between them they'd start taking deductions even though zero plus zero should equal nought!!

Thanks again...

If you already do a self-assessment, then it's a no-brainer... you don't want it to be done via PAYE. However, if you have a single rental property and the amount of 'profit' is going to be quite low (or nothing) then PAYE can work quite well for you... I'm only relaying my personal experience here. Once I got to two properties it was no longer an option due to the amounts, so it's only delaying self-assessment in some cases. I'd say that HMRC only work on the numbers that you provide to them.

That's interesting, that it might be an option to do it by PAYE even if there's no tax to pay (neither of us do self-assessment).  I had assumed that a self assessment return would be necessary to show that the rental profit, on top of my wife's low earnings (she only works a few hours a week), would be within her tax free personal allowance.  Thanks for the info, we'll phone up and see if we can get away without doing it by self-assessment...

Just been on the phone to HMRC's "My Let Property" campaign.  The lady explained that her department is only interested in undeclared property income from previous tax years (2013/14 and before).  She mentioned that if the income is less than 10k, and profit less than 2.5k, that it can be done under PAYE.  However, since our rental income and profit will exceed this, my wife will have to do a self-assessment return.  This doesn't have to be submitted (online) until 31 Jan 2016, but we'll have to register by 5th October 2015.  All this information is available on the .gov.uk site.

Hippogriff, I think you are reading too literally into the line "When you start renting out your property, you must tell HMRC".  From what the lady and website say, you just have to make sure you're registered by the October after the financial year in which you've been letting the property.  They only want you to pay any tax due, on time.  There is no telephone number or property register to declare that you now own a let property (but please correct me if you still think otherwise)!

Think I'll grab a beer and chill out again... 

I did inform them immediately upon letting out my first property because I wanted them to alter my tax code and collect via PAYE... that meant I wanted it to happen as soon as possible, not build-up a 'debt'. As soon as I told them I saw that my next pay slip had a different code and I received a bit less pay... working on estimates obviously, as who can predict what expenses you will have... but I preferred that (at the time) to doing a self-assessment... now, with more properties, I have no choice.

You can still elect to pay the tax through your PAYE code if its less that £3k, but as you say this is arbitrary as its nil.